3 CREDIT CARD NOTIFICATIONS WORTH SETTING UP
For consumers, it’s ‘about maintaining a sense of financial control’ in real time
Your secret weapon for better managing of your credit cards could very well be the same device you could use to read this article: a smartphone. Consumers are relying more than ever on credit card push notifications or pop-up alerts in apps, according to data from banks that show how use has grown from 2016 to
2017. These messages can be customized to alert you to account activity in close to real time, helping you stay on top of your spending while avoiding penalties. They’re already popular with younger cardholders: About 40% of Millennial consumers — those ages
18 to 34 — receive financial alerts as push notifications, says Mark Schwanhausser, director of digital banking at Javelin Strategy & Research, citing a 2017 study by the banking advisory firm. For cardholders, these notifications are “about maintaining a sense of financial control, increasingly in real time, increasingly on your mobile device,” Schwanhausser says. To be sure, the notifications aren’t always perfect; some could be more personal or provide more detail. But “you ought to at least take advantage of what’s there,” he says. Here are three notifications to set up that could help you handle your cards more responsibly.
1 A BALANCE NOTIFICATION
When you’re getting too cozy with your credit limit, you need to know about it right away — not after your credit score has plummeted because of spending. A low credit score can make it harder to qualify for favorable credit terms, get approved to rent an apartment or snag the lowest car insurance rates.
Generally, using less than 30% of your credit card limit is a good rule of thumb, but the lower your balance, the better it is for your score. Some apps let you set customized notifications for when your balance is within a certain dollar amount of the card’s limit.
A balance notification like this “could warn you when you’re getting close to a misstep,” Schwanhausser says.
Consider using this alert to follow the 30% credit-use guideline to keep your credit in good shape.
WHOM IT HELPS MOST:
This alert is especially helpful for cardholders with low limits — such as first-time cardholders — as well as big spenders. When your balance gets too high, it gives you a friendly nudge.
2 A SPENDING NOTIFICATION
When you look at your credit card statement, you might wonder, “Did I really spend money there?” A spending notification, which alerts you when charges are applied to your account, makes it possible to answer that in the moment. This way, money spent isn’t money forgotten. Such alerts could serve as a reminder to slim down your future spending.
“It’s really a great way to stay connected to how you are spending, as well as the activity that’s occurring in your account,” says Meredith McCormick, senior vice president for digital banking operations at Bank of America.
Spending notifications vary by card issuer. With some, you’ll be notified if purchases are over a certain amount, like $20. Other times, you can set it up to notify you with every purchase.
WHOM IT HELPS MOST:
If you have an account with a joint account holder or authorized user, you might encounter more “mystery charges” than most, making this notification valuable. With an alert, it’s easier to investigate unfamiliar expenses right away, instead of at the end of the billing cycle.
3 A BILL DUE NOTIFICATION
It’s easy to goof up and pay your credit card bill a day late, which might rack up a late fee and, in some cases, your issuer could increase your annual percentage rate.
“Our ‘Payment Due’ alert is the most popular,” Alice Milligan, chief customer and digital experience officer at Citi global cards, said in an email.
Similarly, at Bank of America, “Payment Due” is one of the most-used alerts, according to McCormick.
WHOM IT HELPS MOST:
For consumers who don’t rely on auto-pay for their credit card bills, this alert could be a godsend. A quick reminder could save you from steep penalties.
Claire Tsosie is a staff writer at NerdWallet, a personal finance website and USA TODAY content partner providing general news, commentary and coverage from around the Web. Its content is produced independently of USA TODAY. Email: claire@nerdwallet.com. Twitter: @ideclaire7.